On-premises vs cloud: how to choose the best approach

For modern businesses, the database is at the heart of their tech stack, and therefore their wider organisation. Weighing up the right database software approach is crucial to success. The choice between on-premises and cloud is a critical decision that plays an important role in an organisation’s agility, reliability, flexibility, and cost-efficiency.

As companies strive to stay competitive, many have transitioned from legacy on-premises technology to embrace cloud databases, which have emerged as the future of IT infrastructure. According to Gartner, enterprise IT spending on public cloud computing will overtake spending on traditional IT in the next three years. By 2025, Gartner predicts 51% of IT spending will have shifted from traditional solutions to the public cloud, compared to 41% in 2022.

Organisations shouldn’t suddenly move from on-premises to the cloud purely because other companies are doing so. Ultimately, organisations must assess their specific needs and priorities to determine the best database strategy for their business. Here’s how to do it.

Deployment

A public cloud is a third-party managed platform that uses the standard cloud computing model to make resources and services available to remote users around the world.

With a public cloud provider, one of the main benefits is that there’s reduced pressure for organisations to invest in and maintain their own IT resources. Also, the deployment process is relatively straightforward as the public cloud provider supplies the infrastructure needed to host and deploy workloads in the cloud. It also offers tools and services to help customers manage cloud applications, such as data storage, security, and various monitoring and reporting capabilities.

An on-premises approach requires the in-house IT team to take full ownership of deployment. Maintaining every element of the database then becomes the organisation’s responsibility, including addressing any physical server issues that may arise. This can lead to increased cost overhead which may be difficult for some businesses to manage.

Control

On the other hand, the benefits of on-premises data warehouses include control, speed, and security. The level of control offered by on-premises database solutions is a compelling reason for some businesses to retain this approach. Complete ownership of servers translates to full control over all stored data, making it particularly valuable for enterprises operating in highly regulated industries.

In the event of a failure, IT teams have physical access to the hardware and every layer of software to facilitate troubleshooting. They can see indicator lights, cycle power, or replace hardware as required. Yet, having to fix it all in-house can be either a blessing or a curse. While organisations

don't have to rely on third parties to get the system back up and running, which can be time-consuming, they’re entirely dependent on the company’s resources to do it.

In contrast, cloud storage means relinquishing some control by entrusting the database architecture to a commercial provider. This may result in limitations on tool integration and expansion of the database management system infrastructure. By carefully evaluating different cloud data storage options, businesses can find a solution that aligns with their specific requirements.

Security and Compliance

Control is closely linked to security and compliance considerations. On-premises databases are favoured by highly regulated enterprises, such as government agencies, due to the ability to manage all data in-house, providing greater protection against security risks.

Data governance and regulatory compliance often are easier to achieve using an on-premises data warehouse. For example, many organisations struggle to meet General Data Protection Regulation (GDPR) requirements for locating data. You know exactly where your data is located with an on-prem data warehouse.

Regardless, on-premises database management requires organisations to assume complete responsibility for addressing breaches and outages without the immediate support offered by cloud providers. Cloud solutions, when chosen wisely, can provide robust security measures and dynamic compliance capabilities. Businesses must carefully evaluate different cloud providers and their offerings to ensure that security and compliance requirements are met effectively.

Cost

The initial selling point for cloud platforms was their ability to reduce IT costs. Cloud enthusiasts often highlight the pay-as-you-go model, eliminating the need to budget for infrastructure maintenance and resource allocation. While the cloud can offer potential cost savings, accurately estimating the costs of a cloud database can be more tricky than initially perceived. The cloud is not necessarily cheaper overall, but it offers a different expense structure.

For instance, some vendors might appear to be cheaper up-front but are more likely to incur additional costs over time, while others might seem more expensive to begin with but come with services—such as remote database administration—that can help businesses save money in the long run.

Look for transparency in pricing models, and compare options when available using pricing calculators and similar resources. Once you’re using the software in production, enabling monitoring and regular logging of database, system, and resource usage will help you to be aware of usage patterns and adjust workload size accordingly. It’ll also help you avoid cloud spend drifting out of control. Setting alerts, thresholds, and triggers to help you manage notifications, prevent accidental overspending, and set off automated scripts will help in managing costs.

All things Considered

The choice of cloud or on-premises differs from business to business. While the cloud offers agility, scalability, and cost-efficiency, on-premises solutions provide organisations with full control and ownership of their data. Ultimately, the final choice of the cloud versus on-premises model will likely depend on your business-specific use cases for data use and storage, the level of security required to meet compliance standards, and the cost structure you prefer.